Medicare Part D Coverage of Anti-obesity Medications: a Call for Forward-Looking Policy Reform

Abstract

When the Medicare Part D benefit was constructed, drugs for weight loss were explicitly excluded from coverage, as the limited effectiveness and unfavorable safety profile of medications available at the time failed to justify coverage of drugs perceived to be used for cosmetic purposes. In recent years, drugs activating the glucagon-like peptide-1 receptor (GLP-1R) pathway have proved to achieve significant reductions in body weight with a favorable safety profile. The effectiveness of GLP-1R agonists in reducing weight and improving the metabolic profile warrants the reconsideration of the historical exclusion of weight loss drugs from Part D coverage. In this perspective, we outline policy options to enable Part D coverage of GLP-1R agonists. These include legislative change through the passage of the Treat and Reduce Obesity Act and evaluation of coverage policies under the waiver authority of the Center for Medicare and Medicaid Innovation.

When the Medicare Part D benefit was constructed in 2003, drugs for weight loss were explicitly excluded from coverage, even if used for a non-cosmetic indication, such as class III obesity. The limited effectiveness and unfavorable safety profile of weight loss medications available at the time failed to generate justification for the coverage of drugs perceived to be used primarily for cosmetic purposes. While this argument was reasonable given the therapeutic arsenal for obesity available at the time that Part D was enacted, the argument is now strained since the introduction of drugs activating the glucagon-like peptide-1 receptor (GLP-1R) pathway. These include GLP-1R agonists and dual gastric inhibitory polypeptide (GIP) and GLP-1R agonists; in this piece, we refer to both of them as GLP-1R agonists (GLP-1RAs) for brevity. GLP1-RAs have proved to be highly effective in achieving weight loss both in older adults and younger populations.^{1, 2} Although evidence on long-term effectiveness is limited, the existing body of clinical trials and observational studies suggest that weight loss reduction achieved in the first 6–12 months of treatment is sustained throughout the duration of GLP-1RA therapy.^3–6 Beyond weight loss, GLP-1RAs have demonstrated to improve metabolic profile, including lowering blood pressure and reversing prediabetes to normoglycemia, and reducing the risk of major adverse cardiovascular events.^{3, 7}

The strong clinical profile of GLP-1RAs coupled with the major health equity implications of treating obesity⁸ has renewed efforts to advocate for Part D coverage of anti-obesity medications. However, the policy discussion around coverage of GLP-1RAs for obesity is not free of controversy because of its financial implications: First, GLP-1RAs are expensive, with an estimated list price of $1300–$1500 per month of treatment for liraglutide and semaglutide before discounts.⁹ Second, the population eligible for treatment is large, as it is estimated that 53% of the US population would meet the treatment criteria according to Food and Drug Administration (FDA) approval for individuals with body mass index (BMI) over 30 kg/m² or BMI over 27 kg/m² and an obesity-related comorbidity.⁹ Third, life-long chronic treatment may be required for continuous benefit. Finally, the Institute for Clinical and Economic Review (ICER) reported that these agents were not cost-effective compared to lifestyle modification.⁹ These findings, however, were subject to scrutiny, as it is unclear to what extent lifestyle modification is a reasonable comparator, and net prices of GLP1-RAs were largely overestimated—rebates for GLP1-RAs have been estimated at 56–61%,¹⁰ when the ICER assumed them to be in the 23–28% range.⁹

In this viewpoint, we examine the arguments posed against Part D coverage of GLP-1RAs. We then describe policy options available to enable GLP-1RA coverage under Medicare Part D should these barriers be overcome.

Those opposed to Part D coverage of anti-obesity medications have argued that coverage would impact prescription drug affordability more broadly, and crowd out other high-value treatments in the Part D budget. In fact, recent estimates indicate that the annual cost to Medicare could exceed $13billion annually if 10% of Medicare beneficiaries with a coded obesity diagnosis were treated, or $136billion if all were treated.¹¹ However, these estimates did not factor in cost-savings associated with diabetes and cardiovascular risk reduction, which are particularly relevant for Part D as individuals generally remain enrolled in Medicare for life. Savings associated with prevented complications could help offset the cost of treatment.¹² Additionally, existing estimates of budget impact failed to account for the time-limited nature of current prices: new therapies will enter the market (and pricing will become more competitive), and prices will drop when treatments become available as generics. While there may be uncertainty surrounding generic and new brand entry, it is expected that some GLP1-RAs, such as semaglutide, will face price negotiation through the Inflation Reduction Act by 2027.⁶ This is relevant because, if Part D were to expand coverage of GLP1-RAs subject to negotiation such as semaglutide to include obesity, the presentations approved for obesity would be automatically subject to negotiation as well.¹³

Other than budget impact, it is hard to find a reason to justify the historical statutory exclusion of weight loss drugs from coverage other than the stigma of the condition itself. Although there are many systematic factors at the root of the obesity epidemic, some attribute obesity to a personal responsibility and argue that public funding should not be used to support treatment costs.¹⁴ However, public payers cover treatments for conditions that are more strongly determined by personal habits, such as smoking cessation. Moreover, pharmacological interventions for other metabolic syndrome manifestations (including GLP1-RAs for diabetes) are generally considered to be some of the highest-value treatments covered; in fact, the Centers for Medicare and Medicaid Services (CMS) reward Part D plans for encouraging members to adhere to those therapies.

Finally, the recent shortage of semaglutide has raised concerns over manufacturer’s ability to meet demand should Part D cover GLP1-RAs. This should not be a barrier to coverage as the anticipated entry of new branded molecules into the space coupled with the approval of generics would increase the capacity of the supply chain to meet demand.

There are several policy options to enable Part D plans to cover anti-obesity drugs. First, Congress could pass a law reforming the Part D statute to enable coverage of anti-obesity drugs. This is proposed under the Treat and Reduce Obesity Act, originally introduced in 2013 and recently reintroduced by led by Senators Bill Cassidy (R-LA) and Tom Carper (D-DE), and Representatives Brad Wenstrup (R-OH) and Raul Ruiz (D-CA).¹⁵ A potential approach for Congress to reduce the budget impact associated with coverage would be to waive the minimum number of years that a drug has been on the market before it is eligible for negotiation under the Inflation Reduction Act. This would enable CMS to negotiate the prices of recently introduced GLP1-RAs.

On the administrative side, the Center for Medicare and Medicaid Innovation (CMMI) could leverage its waiver authority under section 3021 of the Affordable Care Act to regionally test coverage policies. However, that would require the agency to make a determination on the basis of an Innovation Center Investment Proposal that waiving the exclusion would reduce costs without compromising quality. Additionally, the CMMI approach might not be politically palatable, as advocates may question the rationale for providing coverage to some, but not all, of the Medicare population.

If CMS takes a more passive approach, and waits for a legislative change to eliminate the anti-obesity medication coverage exclusion, their ability to manage utilization will be limited. In the setting of coverage of a class of FDA-approved medications available through the Part D benefit, CMS would rely on private Part D plans to exert influence on eligibility and utilization through step therapy, coverage limits, formulary placement, and prior authorization. However, beneficiary demand and concerns about beneficiary satisfaction may create difficulties for plans that create administrative barriers to access or apply out-of-pocket cost requirements to reduce utilization.

In summary, the strong effectiveness of GLP-1RAs holds promise to revolutionize and potentially reverse the obesity epidemic and warrants the reconsideration of the historical exclusion of weight loss drugs from Part D coverage. Forward-looking research and policy efforts are needed for Medicare to maximize the benefits of GLP-1RAs while limiting budget impact in the short term.

Funding

Hernandez is funded by the National Heart, Lung, and Blood Institute (grant number K01HL142847). Guo is funded by the National Institute of Diabetes and Digestive and Kidney Diseases (grant number R01DK133465).

Declarations:

Conflict of Interest:

Shrank reports salary and equity at Humana and Andreessen Horowitz and is a member of the Board of Directors of WeightWatchers. He is an advisor or Board member of Tend, Nest, UpDoc, Metsera, Thrive Health Tech, and NCQA.